Indosat promises to better Telkom

Indosat promises to better Telkom

Rendi A. Witular, The Jakarta Post, Jakarta

As it officially started its fixed call business on Thursday,
state-owned telecommunications firm PT Indosat promised a better
service than the one being offered by fellow state firm PT
Telekomunikasi Indonesia.

An Indosat executive said the company would provide state-of-
the-art technology fixed-line telephony based on cellular
technology, which would allow customers to enjoy other benefits
aside from the conventional telephone service.

"Indosat will concentrate on providing quality and service. We
are offering cellular technology capable of multimedia services,
which is unavailable from the current fixed-line service," said
Indosat's marketing director Hasnul Suhaimi, referring to the
service being provided by Telkom.

Indosat, which has long held a monopoly over international
calls, has been allowed starting Thursday to enter the local call
businesses, which were monopolized by Telkom for decades.

The creation of what has been described as a duopoly is part
of the government's efforts to gradually liberalize the country's
telecommunications sector in 2003, when it is planned that both
Indosat and Telkom will be able to enter the local, long distance
and international call markets.

When asked to comment on Indosat's plans, Telkom's president
Kristiono told The Jakarta Post: "We are ready to compete."

Telkom now has now about 6.5 million subscribers.

Hasnul said Indosat's fixed phone service was based on Code
Division Multiple Access 2000 1X (CDMA) cellular technology,
which offered clearer sound, wider coverage, smoother
transmission and multimedia facilities.

Like other cellular companies, local calls using the new
Indosat system will be conveyed through stations which function
to receive and transmit the calls. In the Telkom service, the
calls are transmitted through cables.

However, different from the cellular companies, Indosat's
phones will be "fixed" in one location. But, customers can use
the phones within a radius of five kilometer.

Indosat uses the term "fixed access" to describe its service
so as to differentiate it from Telkom's, which is better known as
a "fixed-line service".

Indosat has set the installation price at around US$200 per
phone, which includes the price for the phone equipment. Call
prices are similar to the ones set by Telkom.

Hasnul said that thus far Indosat had no customers for its new
service but that it had spent a total of Rp 170 billion (US$18.8
million) developing the infrastructure, including receiver and
transmitter stations, which is capable of serving 8,000 phone
lines in Jakarta and 5,000 phone lines in Surabaya.

Services in Medan and Batam will start around December, when
the company will have completed setting up facilities capable of
serving 4,000 lines and 3,000 lines respectively.

The government has set a target for Indosat of installing 1.4
million fixed access telephones by 2005.

Hasnul said that at the beginning, Indosat would target
potential customers among corporations and in luxury housing
complexes. In Jakarta, the marketing effort would be focused on
the central business district (CBD) around Jl. Sudirman, Jl. MH.
Thamrin, Jl. Gatot Subroto and Jl. HR. Rasuna Said.

"The installment is very easy. We don't have to dig a trench
or erect a pole for the cables. The subscriber is given the
wireless telephone hardware directly after registration," said
Hasnul.